By Mohammed Salisu Abdullahi
The public will recall that we have recently made a press release concerning the spate of reckless borrowing by the Muhammadu Inuwa Yaya-led Administration of Gombe State.
Just when we thought we had seen it all from the deadbeat Governor, a copy of the letter by the Governor to the Honourable Speaker of the Gombe State House of Assembly dated 20 October 2021 with reference number GO/GD/FED-98/V.I proved us wrong.
In the letter, the Governor is requesting for the resolution of the Gombe State House of Assembly allowing him to access the Federal Government’s Bridging Finance Facility in the sum of N18,746,059,992.57(Eighteen Billion, Seven Hundred and Forty -Six Million, Fifty-Nine Thousand, Nine Hundred and Ninety-Two Naira, Fifty-Seven Kobo).
In the words of the Governor, Mr. President has approved “Six Hundred and Fifty-Six Billion, One Hundred and Twelve Million, Nine Thousand, Seven Hundred and Forty Naira, Three Kobo (656,112,740.03) Bridging Finance to 35 States of the Federation to cushion the effect of the repayment of the existing Federal Government Intervention Facilities (Budget Support Facility, Excess Crude Account Backed Loan Facility and Salary Arrears Bailout Facility).”Implicit is that the Governor has plunged Gombe State into a quagmire of crippling debts.
Nothing is more reckless than borrowing money to repay a debt or cope with the crushing effect of existing debts. For emphasis, we reiterate that the Muhammadu Inuwa Yahaya-led Administration of Gombe State has, between March 2020 and July 2021, procured the following debts:
1. N14.5billion from Guaranty Trust Bank (GTB) Plc;
2. N2,000,000,000 to finance Healthcare Infrastructure Development in Gombe State;
3. N12.0 billion Credit Facility from Guaranty Trust Bank Plc;
4. N10.8 billion Finance Facility from United Bank for Africa (UBA) PLC;
5. N5.0 billion from Family Homes Funds for the provision of 1000 units of Affordable Housing Units.
The above-listed debts do not include the:
1. N11 Billion borrowed by the previous Administration for the Gombe Revenue Optimization Company Limited (GROCOL) but received by the present Government.
This N11 Billion brings the total amount of money obtained as debt by the Muhammadu Inuwa Yahaya-led Administration with a space of a little over two years to N55.3billion. If the Governor is allowed to obtain the
1. N35 Billion debt that has been hurriedly approved by the Gombe State House of Assembly on 13 October 2021 and the proposed debt of
2. N18,746,059,992.57, for which it is seeking approval in his latest letter to the Speaker of the Gombe State House of Assembly, the Governor would have succeeded in amassing a total debt of over
3. N109 Billion (One Hundred and Nine Billion Naira) in a little over of two years of his administration.
This humongous sum is not inclusive of the compound interest on the said sum. Even if the interest rate is a single digit of 9%, the annual interest will be about N10 Billion. The debts from the commercial bank will certainly attract prevailing lending rates. It will therefore not be out of place to project that the interest on the loans would by now be in the neighbourhood of N50 Billion.
There is no gainsaying that the debt service to the overall revenue of Gombe State is excessive and inimical to the economic and developmental aspirations of the State. From the Governor’s showing, the revenue of the state cannot even take care of the recurrent and debt servicing portfolio of the State. It will be no surprise to us if the debts that have been piled up by the Muhammadu Inuwa Yahaya-led Administration send the State into a deep debt shock that will undermine present and future economic progress and growth in the State.
While the State’s humongous debt profile is directly related to the incompetence and cluelessness of the Governor, the public must also be alerted that there is a correlation between the reckless and excessive borrowing of Governors like Muhammadu Inuwa Yahaya and the massive devaluation of the Naira. The Federal Government
has been indulging State Governors and pressuring the Central Bank to lend monies (it doesn’t have) to Governors under all sorts of dubious projects and schemes.
We therefore call on the Central Bank to resist any temptation to further advance any loan to the borrowing Governor of Gombe State who is hellbent on mortgaging the state to satisfy his selfish ends.
▪︎ Abdulahi is a Trustee of the Gombe Good Leadership Association